Immigrants Contributed $220 Billion Net to U.S. Economy in 2018, Research Indicates

A recent social media post by Alex Nowrasteh, Vice President for Economic and Social Policy Studies at the Cato Institute, highlighted the significant positive fiscal contributions of immigrants to the United States economy. While the specific content of the tweet (https://t.co/3uevpTm378) could not be directly accessed, Nowrasteh's extensive research consistently emphasizes the net financial benefits derived from immigration, a topic central to ongoing policy debates.

Nowrasteh's paper, "The Fiscal Impact of Immigration in the United States," details that in 2018, first-generation immigrants collectively generated a cumulative net fiscal impact of approximately $220 billion. This figure, calculated in 2012 dollars, represents 1.2 percent of the U.S. GDP for that year and 3.7 percent of all government spending. According to the research, the average per capita fiscal contribution of these immigrants was $4,846, indicating they paid more in taxes than they consumed in benefits.

Beyond direct fiscal contributions, immigrants are a crucial driver of overall economic growth by expanding the labor force and boosting consumer spending. Recent studies, including projections from the Congressional Budget Office (CBO), estimate that increased immigration could add an additional $8.9 trillion to the U.S. Gross Domestic Product between 2024 and 2034. Immigrants are also noted for their higher rates of new business creation and significant involvement in strategic industry patents.

The positive economic impact extends to the labor market, where immigrants accounted for nearly three-quarters of the growth in the civilian, prime-age labor force between 2000 and 2022. While concerns about wage depression for low-skilled native-born workers are often raised, economic analyses generally find these effects to be minimal or non-existent, with immigrants frequently complementing rather than displacing the existing workforce.

Furthermore, immigration plays a vital role in addressing demographic challenges, particularly the aging U.S. population. Immigrants tend to be younger and of working age, contributing to the tax base that supports social security and Medicare, thereby helping to stabilize the dependency ratio. This demographic advantage is increasingly important as the native-born population ages and fertility rates remain below replacement levels.